Friday, June 27, 2008

Thailand's diesel subsidy to continue

The diesel price subsidy programme for motorists, set to expire in July, is likely to be extended as the Energy Ministry is trying to deal with the record price.

Energy Minister Poonpirom Liptapanlop said she was considering whether the reduction of 90 satang per litre on the retail diesel price, funded by the state Oil Fund and the Energy Conservation Fund, should be extended or even increased.

''Worse still, the diesel price has reached a record high at above 42 baht a litre. We don't think it is a good idea to let motorists struggle with diesel prices jumping right now,'' she said yesterday.

The National Energy Policy Council (NEPC) would be responsible for extending or raising the existing subsidy rate. The subsidy was initiated in March, with 50 satang per litre contributed from the Energy Conservation Fund, 10 satang from the Oil Fund and another 30 satang absorbed by the premium petrol levy collection to the Oil Fund.

An employee at an LPG station on Kalapapruek Road posts a sign saying "out of fuel" yesterday. Demand for LPG has soared as diesel and petrol prices continue to rise with global oil prices. — PHONGTHAI WATTANAVANITVUT

Apart from diesel, Lt Gen Poonpirom has been criticised for a subsidy programme for liquefied petroleum gas (LPG), whereby retail prices would be split in July.

The retail price for the transport and industrial sectors would be partly floated to near global market levels, while the price for households using LPG for cooking gas would continue to be subsidised.

The partial floating of LPG is aimed to help PTT Plc, which is the sole LPG importer, to curb their $580 per tonne import burden.

The government fixed the retail price of LPG at $320 per tonne, far below the $900 global market price.

The Energy Ministry yesterday also announced soft loans designed for households to change to efficient appliances. Initially, a one-billion-baht-per-year budget would be provided by the Energy Conservation Fund.

Loans would be processed by five banks, with a limit of 10,000 baht for each appliance and 30,000 baht for an air-conditioner. Each bank would receive 200 million baht interest-free from the fund. The banks are Bangkok Bank, Krung Thai Bank, Ayudhya Bank, the Bank for Agriculture and Agricultural Co-operatives and the Government Savings Bank.

The minister expects 75,000 households to apply for the one-year soft loan from the banks, with the programme running from next week to October 2009. ''The ministry hopes to see households use only energy-efficient appliances, and we are ready to provide compact fluorescent lightbulbs, electric fans, ovens and air-conditioners,'' she said.

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